PARIS, June 15 France is continuing to press for
guarantees from contenders to buy energy assets from Alstom
, as Siemens and Mitsubishi Heavy Industries
consider a joint move to challenge a formal offer from
General Electric.

The race to acquire power activities from Alstom, better
known for its high-speed TGV trains, is entering a crucial week,
with Siemens due to present an offer by Monday ahead of a June
23 cut-off date set by GE for its 12.4 billion euros ($16.88
billion) bid for all of Alstom's energy assets.

The French government has already secured a pledge from GE
to create 1,000 new jobs in France within three years of a deal,
according to sources close to the discussions, and Finance
Minister Michel Sapin said on Sunday he expected the U.S.
conglomerate to improve its offer further.

"Mitsubishi forming an alliance with Siemens improves
Siemens' offer," Sapin said in an interview broadcast on Europe
1 radio and news channel iTele. "I think that GE is also going
to improve its offer."

GE said in an emailed statement it had "made progress in our
discussions with the French government, including expanded
alliances in the energy businesses with French investors as well
as a global partnership with Alstom on transport."

Siemens and Mitsubishi are putting the finishing touches on
an offer for Alstom's turbine businesses, including a cash
element of roughly 9 billion euros ($12.3 billion), according to
sources close to the bidders.

Siemens' supervisory board was due to meet at 1600 GMT to
consider an offer for Alstom. The German group has not commented
on its discussions with Mitsubishi, but has said it would unveil
a formal bid for Alstom assets by June 16.

In the move being considered by Siemens and Mitsubishi, the
German firm would acquire Alstom's gas turbines business while
the Japanese group would inject cash and industrial assets into
a joint venture in steam turbines, sources said.

DEFENDING JOBS

Under the deal, Mitsubishi and the French state would take
equal stakes in Alstom, acquiring part of the 29 percent holding
of French group Bouygues, union representatives said
after meeting Economy Minister Arnaud Montebourg.

This could involve French state bank BPI acquiring a stake
in Alstom alongside Mitsubishi, the Wall Street Journal reported
on Sunday. But a source familiar with the situation said BPI was
"ready to be involved in any scenario", including with
Mitsubishi or GE.

A Bouygues spokesman said the group had not been approached
by any party regarding a sale of its stake in Alstom, adding:
"Bouygues wishes to remain a long-term shareholder in Alstom
with a 29.3 percent stake."

Bouygues would support the proposal recommended by the
Alstom board, he said.

In a second step, separate to a turbines deal, Siemens is
also proposing to combine its rail activities with Alstom's,
sources said.

An Alstom spokeswoman declined to comment.

Finance Minister Sapin said he did not have "any preference"
for a bidder, but France would defend jobs and investment
through a new decree extending the government's powers to block
foreign takeovers in sectors deemed strategic.

Alstom is a big private-sector employer in the country and
was bailed out by the state a decade ago.

"We will not decide for (Alstom) but we will use our
weight," Sapin said.

French President Francois Hollande will host a meeting on
Alstom on Tuesday morning, according to his official diary,
while Siemens Chief Executive Joe Kaeser is due to appear before
a French parliamentary committee later that day.

Montebourg reiterated in a newspaper interview on Friday
that he favoured an alliance that preserved Alstom's identity,
industrial sites, decision centres and jobs.

He said a tie-up with Mitsubishi would be "a serious
alternative" to GE's proposal.

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